Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Commercial Vehicle Group (CVGI) and Gentherm (THRM). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Commercial Vehicle Group and Gentherm are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CVGI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CVGI currently has a forward P/E ratio of 6.39, while THRM has a forward P/E of 21.63. We also note that CVGI has a PEG ratio of 0.64. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. THRM currently has a PEG ratio of 1.66.
Another notable valuation metric for CVGI is its P/B ratio of 1.77. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, THRM has a P/B of 3.17.
These are just a few of the metrics contributing to CVGI's Value grade of A and THRM's Value grade of C.
CVGI has seen stronger estimate revision activity and sports more attractive valuation metrics than THRM, so it seems like value investors will conclude that CVGI is the superior option right now.
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Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report
Gentherm Inc (THRM) : Free Stock Analysis Report
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